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How to win that critical 4th quarter sales crunch

  • 3 min read

The two most important attributes retailers are looking for this time of year are service level and sales.

The 4th quarter is a critical sales period in the food and beverage industry. Retailers put considerable resources into winning between October and December, as their performance during these months will significantly impact their annual results. As suppliers into retail, it’s important to understand this and consider ways to support customers during this time.

To assess this, measure your performance relative to metrics they see as important. The two most important attributes retailers are looking for this time of year are service level and sales. Retailers need product, and it must sell-through.

Watch your service levels

Retailers define service level as the cases delivered (on time, with the correct paperwork, to the right place, in the right condition) divided by the number of cases they order. Most often, they’ll look at sales in terms of year-over-year increase and sell-through.

Seasonal product still in store post-season isn’t a win for anyone. You can ask customers for the sales in a specific period. Some will share this information, and some won’t. If you can obtain it, the sales divided by the product delivered is how you calculate your sell-through. If they don’t share the sales data, visit some representative stores at the end of the season and count the remaining inventory.

Calculate the sell-through

Once you extrapolate this to the entire group of stores, subtract the remaining inventory from the product you delivered and divide it by the product you delivered to calculate the sell-through. Suppliers don’t always have access to sell-through, but if you do, it’s important to assess the performance of your products in these terms.

Communicate with your customers during the 4th quarter. They’re busy, and you might not always get a response, but it’s still important to share your story. Keep it brief and focus on what they’re interested in. They’re managing thousands of SKUs, so they might not realize you had 100% service level or that you brought in extra shifts to meet a last-minute order.

Visit stores and retailer’s websites during this busy selling period. Take time to assess the overall message they’re communicating to consumers and how you support it. Explore the department where your products are merchandised to find anything new or unique that could impact your business or be a future opportunity. You might find larger sizes or even products bundled together listed for this period when consumers are shopping for entertaining or bigger crowds.

Focus on your category and make sure your product is merchandised as you’d expect. When you’re in stores, talk to staff and learn what you can about the season and how your product is performing. When visiting the websites, purchase your product to ensure it flows through the process properly.

Set up your customers for success

You should always review performance in the 4th quarter with your customer. Regardless of whether your product is a seasonal item or not, this is when sales are highest. Your customers will be focused on increasing their market share in these critical months. You can strengthen your relationship with your customers by helping them achieve this goal.  Request the meeting early in the new year and keep it brief. Focus on the key metrics and the plan you agreed on before the season. This is also an opportunity to share insights for the next year. Many retailers plan key seasons a year in advance, so you need to get your ideas and opportunities on the table early.

Your customers will respect you for your focus on a key selling period in their business. When they perceive you’re doing things to ensure they win the 4th quarter and you illustrate your business performed, you’ll both be successful.

Article by: Peter Chapman